Last week's impressive achievement in docking a private spacecraft at the International Space Station has earned entrepreneur Elon Musk and his SpaceX team a place in the history books. No private company has ever managed to accomplish such a feat before, and SpaceX is now poised to repeat the delicate, demanding mission over and over again under a $1.6 billion NASA contract.

The SpaceX saga is an appealing story on many levels. First, it demonstrates the dynamism of private enterprise. Second, it has the potential to save taxpayers and customers alike billions of dollars. Third, it rewards a risk-taker who committed most of his personal fortune and waking hours to making a revolutionary venture work. And fourth, it is underpinned by a vision of mankind's future in space that renews our sense of human possibilities.

No doubt about it, Elon Musk has much to be proud of today. He is well on his way to becoming the latest example of that American icon, the immigrant who works tirelessly and ends up changing the world. People may one day compare him with Nikola Tesla, the famous Serbian inventor and futurist after whom Musk named his other big venture, which makes sleek electrically-powered automobiles.

However, Tesla's life is a cautionary tale of how fleeting the success of technological entrepreneurs can be. Sometimes the market simply isn't ready to appreciate the fruits of their genius. Other times, the opportunity to make money is undercut by rivals and imitators. Regulators may interfere with the ability of entrepreneurs to price their services attractively, and beneficiaries of the status quo may deploy lawyers and politicians to defend their franchises.

Elon Musk faces all of these challenges, and in addition has picked a line of work that is intrinsically dangerous. Although traditional launch providers like Boeing and Lockheed Martin have managed to loft scores of rockets into space without a major mishap, they aren't trying to achieve revolutionary price reductions in their services like Musk is. They also have greater resources to cope with reverses. For instance, Lockheed Martin books more revenues in a day than the $100 million that Musk has personally invested in his venture over the last decade.

So you don't have to be a critic of SpaceX to see the potential downside for investors. The company made some mis-steps en route to its technological triumph last week, but Edison made literally thousands of mis-steps in developing the incandescent light bulb, and in the end the venture was so successful it was declaring a new dividend every Saturday evening. The real problem resides with Elon Musk's main customer, the notoriously capricious and arbitrary federal government.

In order for the SpaceX business strategy to work, the company must eventually achieve economies of scale made possible by high rates of launch activity. In the past, Musk has talked about ramping up to 20 launches per year, which would enable SpaceX to leverage its vertically-integrated sourcing strategy for major price reductions. But when you get most of your money from the government as SpaceX does, you do things on Washington's schedule.

Thus if the federal budget is cut by sequestration or a new president with different priorities is elected or NASA decides to shift its goals in space, the business strategies of space entrepreneurs can be impaired overnight. Just look at what President Obama has done during his relatively brief time on the national stage. In November of 2007 while campaigning for the Democratic presidential nomination, candidate Obama proposed delaying the Bush Administration's biggest manned spaceflight project by five years to free up money for an education initiative he wanted to pursue. Once in office, he killed the project completely.

Episodes like that one explain why the traditional providers of launch services and spacecraft are really, really big. If you aren't big, then you may lack the breadth and depth to cope with some unexpected shift in Washington's plans. It doesn't have to be a move that is aimed at your enterprise or even at the space sector, because the government is so huge it often implements policies that alter the competitive landscape for whole industries without even realizing what it has done.

The commercial space industry is facing just such a development right now, with some members of Congress proposing to cut funding in half for a crew vehicle that several companies are competing to build. Administration officials say competition is crucial to getting the best price and performance, but key legislators aren't buying their arguments. These sorts of controversies crop up every year in Congress. If you're a behemoth like Boeing, you roll with the punches. If you're a small player like SpaceX, your future may be on the line.

When you add up all the risks -- the competitive challenges, the political uncertainties, the technological demands, and the sheer physics of the missions -- it is clear that Elon Musk and the SpaceX team will face big threats to their enterprise for years to come. Perhaps we should admire them even more for that fact. But it is too soon to say whether their discipline and courage will ever be rewarded by investors.